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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to ____________.
COMMISSION FILE NUMBER: 0-19582
OLD DOMINION FREIGHT LINE, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 56-0751714
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1730 WESTCHESTER DRIVE
HIGH POINT, NC 27262
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER (910) 889-5000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK ($.10 PAR VALUE)
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 14, 1997, was $ 23,026,628.
As of March 14, 1997, the registrant had outstanding 8,308,196 shares of
Common Stock ($.10 par value).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders are incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
GENERAL
Old Dominion Freight Line, Inc. ("Old Dominion", the "Company" or the
"Registrant", as appropriate for this report), is an inter-regional and regional
motor carrier transporting primarily less-than-truckload ("LTL") shipments of
general commodities, including consumer goods, textiles and capital goods to a
diversified customer base. The Company serves regional lanes in the Southeast,
Northeast, Midwest and West regions of the country. Old Dominion also serves
inter-regional routes connecting these geographic regions and major metropolitan
markets in the continental United States.
Along key inter-regional lanes, Old Dominion maintains published
service standards that generally provide for delivery time schedules that are
faster than those of its principal national competitors. The Company's service
standards provide for delivery times of between two and three days along key
inter-regional lanes between 500 and 1,500 miles. The Company generally provides
for one- or two-day delivery along regional lanes of less than 500 miles, which
Old Dominion believes is competitive.
The Company seeks to build freight volume by offering high quality and
timely service at competitive prices. Increasing lane density enables Old
Dominion to handle freight fewer times, reduce unit operating costs and improve
service. In addition, Old Dominion lowers its cost structure and reduces cargo
claims by using twin 28-foot trailers exclusively in its linehaul operations.
Use of twin 28-foot trailers permits the Company to transport freight directly
from its point of origin to destination with minimal unloading and reloading and
permits more freight to be hauled behind a tractor than could be hauled if the
Company used one larger trailer. Further, management believes that it gains an
operating advantage by maintaining flexible work force rules among its nonunion
labor force, permitting the Company to utilize service center employees for
different job responsibilities to meet delivery schedules.
The Company also transports shipping containers between several
southeastern port cities and inland points in its core southeastern service
area. For the year ended December 31, 1996, container services accounted for
3.3% of the Company's operating revenue. Old Dominion also provides assembly and
distribution services primarily to its retail customers.
THE LTL INDUSTRY
Old Dominion transports primarily LTL shipments, which are defined as
shipments weighing less than 10,000 pounds. Generally, LTL carriers transport
freight from multiple shippers to multiple consignees on a scheduled basis.
Deregulation of the trucking industry in 1980 created a new operating
environment for motor carriers, permitting them to choose, for the first time,
their operating routes and pricing policies. Certain LTL carriers adopted
pricing or discounting policies that reduced prices below the cost of providing
service, causing many LTL carriers to cease operations. Most of the remaining
LTL carriers have focused on providing service in either a regional market or
the national market. The Company believes that this trend has created an
opportunity for it to increase lane and service center density along key
inter-regional lanes in which a relatively small number of carriers offer high
quality service. Old Dominion's strategy is to continue to capitalize on the
opportunities provided by deregulation by building its market share in key
inter-regional and regional lanes. From time to time, certain national carriers
have sought to compete in selected inter-regional markets and along selected
inter-regional lanes and may seek to do so in the future as national markets
mature.
LTL companies are referred to as regional, inter-regional or national
motor carriers, based upon length of haul. Carriers with average lengths of haul
less than 500 miles are referred to as
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regional carriers. Carriers with average lengths of haul between 500 and 1,000
miles are referred to as inter-regional carriers. National carriers generally
operate coast-to-coast and have average lengths of haul that exceed 1,000 miles.
For the year ended December 31, 1996, Old Dominion had an average length of haul
of 746 miles.
In the motor carrier business, revenue is a function of volume and
pricing and is frequently described in relation to weight. The Company tracks
revenue per hundredweight (pounds divided by 100) as a measure of pricing or
rate trends. In addition to pricing, the average revenue per hundredweight is
also a function of the weight per shipment, length of haul and commodity mix.
LTL carriers can improve profitability by increasing lane and service
center density. Increased lane density lowers unit operating costs and improves
service. Increased service center density, by increasing the amount of freight
handled at a given service center location, improves utilization of fixed
assets.
Old Dominion believes that it generally provides faster delivery
service along key inter-regional routes than its principal national competitors,
in part, because of its more efficient service center network. National carriers
use several breakbulk facilities to unload and reload freight, which tends to
increase lane density but also adversely affects service. Old Dominion has
established a strategic network of 74 service centers, of which four operate as
major breakbulk facilities. Approximately 60.1% of the Company's LTL tonnage
moves directly from the originating service center to its destination without
being reloaded to another trailer at a breakbulk facility.
REVENUE EQUIPMENT AND MAINTENANCE
At December 31, 1996, the Company operated 1,528 tractors. The Company
uses new tractors in linehaul operations for approximately three to four years
and then transfers those tractors to pickup and delivery operations for the
remainder of their useful lives. In a number of Company service centers,
tractors perform pickup and delivery functions during the day and linehaul
functions at night to maximize tractor utilization.
At December 31, 1996, the Company operated a fleet of 6,985 trailers.
As the Company has expanded and its needs for equipment have increased, the
Company has purchased new trailers as well as trailers meeting its
specifications from other trucking companies that have ceased operations. These
purchases, though providing an excellent value, have the effect of increasing
the trailer fleet's average age; however, the Company believes the age of its
trailer fleet compares favorably with its competitors.
The table below reflects, as of December 31, 1996, the average age of
Old Dominion's revenue equipment:
Type of Equipment Number
(Categorized by Primary Use) of Units Average Age
Linehaul tractors 1,233 3.0 years
Pickup and delivery tractors 295 5.5 years
Pickup and delivery trucks 22 6.3 years
Linehaul 28-foot trailers 5,847 5.8 years
Pickup and delivery trailers 1,138 10.9 years
The Company currently has major maintenance operations at its service
centers in Atlanta, Georgia; Morristown, Tennessee; Los Angeles, California;
Columbus, Ohio; and Greensboro, North Carolina. In addition, five other service
center locations are equipped to perform routine and preventive maintenance
checks and repairs on the Company's equipment.
3
The Company has an established scheduled maintenance policy and
procedure that is administered by the Vice President - Equipment and
Maintenance. Linehaul tractors are routed to appropriate maintenance facilities
at designated mileage intervals ranging from 10,000 to 12,500 miles, depending
upon how the equipment is utilized. Pickup and delivery tractors and trailers
are scheduled for maintenance at designated time intervals ranging from 60 to 90
days.
The table below sets forth the Company's capital expenditures for
certain revenue equipment during 1994, 1995 and 1996:
Year Service Centers Tractors Trailers Total
1994 $ 1,227,000 $11,828,000 $12,517,000 $25,572,000
1995 $ 485,000 $ 9,727,000 $12,918,000 $23,130,000
1996 $12,513,000 $13,116,000 $10,120,000 $35,749,000
SERVICE CENTER OPERATIONS
At December 31, 1996, Old Dominion conducted operations through 74
service center locations, of which it owns 25 and leases 49. The Company
operates major breakbulk facilities in Atlanta, Georgia; Columbus, Ohio;
Morristown, Tennessee; and Greensboro, North Carolina, while using some smaller
service centers for limited breakbulk activity. Old Dominion's service centers
are strategically located to permit the Company to provide high quality service
and minimize freight rehandling to reduce costs.
Each service center is responsible for the pickup and delivery of
freight for its own service area. All inbound freight received by the service
center in the evening or at night is scheduled for local delivery the next
business day, unless a customer requests a different delivery schedule. Each
service center loads the freight by destination the day it is picked up.
Management reviews the productivity and service performance of each service
center on a daily basis in order to ensure quality service.
The Company also has established primary responsibility for customer
service at the local level. Service center employees trace freight movements
using the Company's automated tracing systems and respond to customer requests
for delivery information. While the Company maintains primary accountability for
customer service at the local service center, the Company has established a
customer service function at the corporate offices to offer additional customer
support.
The Company plans to expand capacity at existing service centers as
well as expand the number of service centers geographically as opportunities
arise that provide for profitable growth and fit the needs of its customers.
LINEHAUL TRANSPORTATION
The Company's linehaul department is responsible for directing the
movement of freight among the Company's service centers. Linehaul dispatchers
monitor the movement of freight among service centers with an on-line automated
dispatch system that operates continuously. Each morning, the Company's senior
management reviews the prior day's freight movement, transit times, load
factors, empty miles and other key statistics to monitor the Company's
performance.
The Company uses scheduled runs, and schedules additional runs as
necessary, to meet its published service standards. The Company uses twin
trailers exclusively in its linehaul operations to reduce breakbulk handling and
to increase linehaul productivity.
4
MARKETING AND CUSTOMERS
At December 31, 1996, the Company had a field sales staff of 192
employees. The Company compensates its sales force, in part, based upon revenue
generated, which the Company believes helps motivate its marketing employees.
The Company utilizes a computer modeling program to determine the price
level at which a particular shipment of freight will be profitable. Elements of
the pricing model may be modified, as necessary, to simulate the actual
conditions under which the freight will be moved. From time to time, the Company
also competes for business by participating in bid solicitations. Customers
generally solicit bids for relatively large shipments of freight for a period of
from one to two years and typically choose to enter into a contractual
arrangement with a limited number of motor carriers based upon price and
service.
For the year ended December 31, 1996, Old Dominion's largest 20, 10,
and five customers accounted for approximately 24.2%, 18.9% and 14.4%,
respectively, of the Company's operating revenue. The Company's largest customer
for 1996 accounted for approximately 4.5% of operating revenue. The Company's
business is not dependent on any one customer or group of customers, or on any
particular industry.
COMPETITION
The transportation industry is highly competitive on the basis of both
price and service. Old Dominion competes with regional, inter-regional and
national LTL carriers and, to a lesser extent, with truckload carriers,
railroads and overnight delivery companies, certain of which have greater
financial resources, more equipment or greater freight capacity than the
Company. The Company believes that it is able to compete effectively in its
markets by providing consistently high quality and timely service at competitive
prices.
SAFETY AND INSURANCE
The Company's Directors of Safety and Personnel, Claims and Claims
Prevention implement and monitor its safety and loss prevention programs with
the assistance of nine field supervisors. As a result of the Company's increased
emphasis on safety since 1987, the accident frequency, as defined by the
National Safety Council (including minor and unavoidable accidents), has
decreased from 12.5 accidents per million miles for the year ended December 31,
1989, to 8.0 accidents per million miles for the year ended December 31, 1996.
The Company is self-insured for bodily injury and property damage
claims up to $250,000 per occurrence and for cargo claims up to $50,000 per
occurrence. The Company also is self-insured for workers' compensation in
certain states and has first dollar or high deductible plans in the other
states. The Company believes that its policy of self-insuring up to set limits,
together with its safety and loss prevention programs, is an effective means of
managing insurance costs.
Old Dominion believes that its current insurance coverage is adequate
to cover its liability risks.
FUEL AVAILABILITY AND COST
The motor carrier industry is dependent upon the availability of diesel
fuel. Increases in fuel prices and fuel taxes, shortages of fuel or rationing of
petroleum products could have a material, adverse effect on the operations and
profitability of the Company. The Company has not experienced difficulties in
maintaining a consistent and ample supply of fuel in the past and in time of
extreme price increases, has implemented a fuel surcharge to customers which is
consistent with other competitors. Management believes that the Company's
operations and financial condition are susceptible to the
5
same fuel price increases or fuel shortages as those of its competitors. Fuel
costs normally fluctuate between three and five percent of operating revenue.
Fuel expense was 4.9% of revenue for 1996.
EMPLOYEES AND DRIVERS
At December 31, 1996, the Company employed 3,948 persons in the
following categories:
Number of
Category Employees
Salaried and clerical 982
Drivers 1,944
Platform 695
Mechanics 132
Sales (Corporate and Field) 195
At December 31, 1996, the Company employed 884 road drivers and 1,060
city drivers. All drivers hired by the Company are selected based upon driving
records and experience. Drivers are required to pass drug tests at employment
and are later required to take such tests periodically, by random selection.
Although the industry experiences driver shortages from time to time, Old
Dominion has been successful in maintaining an adequate and qualified driver
force.
To help fulfill driver needs, the Company offers employees the
opportunity to become drivers as the need arises. Since 1988, the Company has
operated its own driver training program. In management's opinion, driver
qualification programs, which are required to be taken by all drivers, have been
an important factor in improving the Company's safety record. Drivers with safe
driving records are rewarded with bonuses of up to $1,000 annually. Driver
safety bonuses paid in 1996 were approximately $326,000.
REGULATION
The Motor Carrier Act of 1980 significantly deregulated the trucking
industry and increased competition among motor carriers. Following enactment of
the Motor Carrier Act, applicants have obtained operating authority more easily,
and interstate motor carriers such as Old Dominion have been able to change
their rates more freely with less regulatory scrutiny and delay. The law also
removed many route and commodity restrictions on transportation of freight.
Effective January 1, 1995, the passage by the U.S. Congress of Section
601 of the Federal Aviation Administrative Authorization Act and the Trucking
Industry Regulatory Reform Act ("TIRRA") deregulated intrastate operating
authority. Prior to TIRRA, the Company maintained intrastate authority in the
states of North Carolina, Virginia, South Carolina, Georgia and California. The
states of Florida and New Jersey had already eliminated their restrictions on
operating authority. The passage of TIRRA provides additional intrastate growth
opportunities in the states in which the Company operates.
The Company was regulated by the Interstate Commerce Commission (the
"ICC") until passage of the ICC Termination Act of 1995, which abolished the ICC
on December 31, 1995. The Surface Transportation Board, an independent entity
within the United States Department of Transportation ("DOT"), assumed many of
the responsibilities of the ICC. The Company is also regulated by various state
agencies. These regulatory authorities have broad powers, generally governing
matters such as authority to engage in motor carrier operations, rates, certain
mergers, consolidations and acquisitions, and periodic financial reporting. The
trucking industry is subject to regulatory and legislative changes that can
affect the economics of the industry by requiring changes in operating practices
or influencing the demand for, and the costs of providing services to, shippers.
6
Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as weight and dimensions of equipment are
also subject to federal and state regulation. The Company is subject to federal,
state and local environmental laws and regulations, particularly relating to
underground fuel storage tanks ("USTs"). The Company is in compliance with
applicable environmental laws and regulations relating to USTs and does not
believe that the cost of future compliance should have a material adverse effect
on the Company's operations or financial condition. The Company also believes
that it is in compliance with other applicable environmental laws and
regulations.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth information regarding the present
executive officers of the Company:
Name and Age Positions and Offices with the Company
Earl E. Congdon (66) Chairman of the Board of Directors and Chief
Executive Officer
John R. Congdon (64) Vice Chairman of the Board of Directors
John A. Ebeling (59) President, Chief Operating Officer and Director
J. Wes Frye (49) Treasurer, Chief Financial Officer and Assistant
Secretary
Joel B. McCarty, Jr. (59) General Counsel and Secretary
Earl E. Congdon has been with the Company since 1950 and has served as
Chairman of the Board and Chief Executive Officer since 1985 and as a director
since 1952. He is a son of E. E. Congdon, one of the founders of Old Dominion.
John R. Congdon has been with the Company since 1953 and has served as
Vice Chairman of the Board since 1985 and as a director since 1955. He is also
the President of Old Dominion Truck Leasing, Inc., a North Carolina corporation
that is engaged in the full service leasing of tractors, trailers and other
equipment, to which he devotes more than half of his time. He is a son of E. E.
Congdon, one of the founders of Old Dominion, and the brother of Earl E.
Congdon.
John A. Ebeling has been President and Chief Operating Officer since
joining the Company in August of 1985 and was first elected a director in August
of 1985. Mr. Ebeling was previously employed by ANR Freight Systems from 1978 to
1985, holding the positions of Chairman and Chief Executive Officer.
J. Wes Frye has been Chief Financial Officer and Treasurer since
joining the Company in February of 1985 and has served as Assistant Secretary
since December of 1987. Mr. Frye served as the Vice President of Finance of
Builders Transport, Inc., from 1982 to 1985, and in various positions, including
Vice President - Controller of Johnson Motor Lines from 1975 to 1980. Mr. Frye
is a Certified Public Accountant.
Joel B. McCarty, Jr., has been General Counsel and Secretary since
joining the Company in June of 1987. Before joining Old Dominion, he was
Assistant General Counsel of McLean Trucking Company and was in private law
practice prior to 1985.
Information concerning the Company's other significant employees is as
follows:
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Name and Age Position
Ernest Brantley (60) Senior Vice President -- Operations
David S. Congdon (40) Vice President -- Quality and Field Services
Robert M. Delgado (58) Vice President -- Western Area
Gregory C. Gantt (41) Vice President -- Southern Area
Terry L. Hutchins (38) Vice President -- Central Area
Richard F. Keeler (47) Vice President -- Midwest Area
Mark M. Madden (45) Vice President -- Northern Area
Buddy S. McBride (51) Vice President -- Transportation
J. Edward Richardson (52) Vice President -- Equipment and Maintenance
J. Timothy Turner (41) Vice President -- Sales and Marketing
John B. Yowell (45) Vice President -- Corporate Services
John P. Booker, III (40) Assistant Vice President and Controller
Ernest Brantley, Senior Vice President - Operations since January 1992,
joined the Company as Vice President - Operations in January of 1990. He was
previously with Thurston Motor Lines for 35 years where he served in various
capacities, including Executive Vice President from 1981 to 1987. Following its
acquisition by Brown Transport Co., Inc., Mr. Brantley served as Senior Vice
President of Brown Transport from 1987 to 1990.
David S. Congdon has been employed by the Company since 1978 and, since
May 1996, has served as Vice President - Quality and Field Services. He has
held various positions in the Company including Vice President - Quality, Vice
President - Transportation, President - Dominion Furniture Xpress (a division
of Old Dominion that specialized in furniture transportation) and held other
positions in operations and engineering. He is the son of Earl E. Congdon.
Robert M. Delgado joined the Company in December 1985 and was promoted
to Vice President - Western Area in October 1996. He has also served as the
Director of the Western Area and as the Los Angeles Service Center Manager.
Prior to joining the Company, he held several management positions with Watkins
Motor Lines and American Freightways.
Gregory C. Gantt joined the Company in November 1994 as Vice President
- - South Central Area and assumed responsibility for the Southern Area in
January 1996. From 1978 to 1994 he was employed by Carolina Freight Carriers
where he held various positions including Vice President - Southern Region,
Regional Manager and Operations Director.
Terry L. Hutchins joined the Company in December 1992 as Vice President
- - Southern Area and became Vice President - Central Area in January 1996.
Prior to joining the Company, he held several terminal manager and sales
positions with Carolina Freight Carriers and McLean Trucking Company between
1980 and 1992.
Richard F. Keeler was promoted to Vice President - Northern Area in
May 1994 and became Vice President - Midwest Area in April 1995. He has also
served as Director of Pickup and Delivery Operations since joining the Company
in July 1993. Formerly, he was employed by Standard Trucking Company where he
served in various senior management positions.
Mark M. Madden joined Old Dominion in January 1986 and was promoted to
Vice President - Northern Area in April 1995. He has also served as the Area
Manager - Metro Area and as a Service Center Manager in the Northern Area.
Buddy S. McBride joined the Company in 1977 and held various positions
prior to becoming Vice President - Central Area in 1991. In December 1992, he
was promoted to Vice President - Transportation.
8
J. Edward Richardson has been with Old Dominion since December 1986 and
has been Vice President - Equipment and Maintenance since March of 1990. From
1986 to 1990, he was Director of Maintenance.
J. Timothy Turner has been employed by the Company since July 1981 and
was promoted to Vice President - Sales and Marketing in August 1994. He has
also served as Vice President - National Accounts, Director of Sales, Central
Area Director of Sales and a District Sales Representative prior to 1986. He
was employed by McLean Trucking Company from 1977 to 1981.
John B. Yowell has been employed by the Company since February 1983 and
was promoted to Vice President - Corporate Services in November 1994. He has
held the position of Vice President - Central Region, Vice President - South
Central Area, Assistant to the President and Vice President - Management
Information Systems. He is a son-in-law of Earl E. Congdon.
John P. Booker, III, joined the Company in April 1987 and was promoted
to Assistant Vice President and Controller in May 1995. Between 1979 and 1987 he
was employed by RJR Nabisco, Inc. and Monsanto Company where he held various
accounting positions. Mr. Booker is a Certified Management Accountant.
ITEM 2. PROPERTIES
The Company owns its general offices located in High Point, North
Carolina, consisting of a four-story office building of approximately 56,500
square feet on 10.3 acres. In addition, the Company leases approximately 15,000
square feet of office space near the general office location. The Company also
owns operating service center facilities in Baltimore, Maryland; Richmond,
Martinsville and Norfolk, Virginia; Charlotte, Hickory, Wilson and Fayetteville,
North Carolina; Atlanta, Georgia; Columbia and Greenville, South Carolina;
Orlando, Jacksonville and Tampa, Florida; Tupelo, Mississippi; Morristown,
Memphis, Nashville and Chattanooga, Tennessee; Cincinnati and Columbus, Ohio;
Kansas City, Missouri; Los Angeles, California; Minneapolis, Minnesota; and
Dallas, Texas.
The Company also owns non-operating properties in Memphis and
Nashville, Tennessee; Jacksonville, Florida; Los Angeles, California; St. Louis,
Missouri; Wilson, North Carolina; New Orleans, Louisiana; Greenville,
Mississippi; Baltimore, Maryland; and an office and maintenance facility in
Birmingham, Alabama, all of which are held for lease. Currently the
Jacksonville, Los Angeles and St. Louis properties are not under lease; the
Birmingham, Wilson, New Orleans, Greenville and Baltimore properties are leased
until September 2001; the Nashville property is leased until June 1998; and the
Memphis property is leased until December 1998.
Old Dominion leases 49 of its 74 service centers. The length of the
leases range from month-to-month to leases that expire on July 31, 2004. The
Company believes that its leased facilities are adequate for its existing needs
and that, as current leases expire, it will be able either to renew them or find
comparable facilities without incurring any material negative impact on service
to customers or its operating results.
The Company believes that all of its properties are in good repair and
are capable of providing the level of service required by current business
levels and customer demands.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the Company is a party
or of which any of its property is the subject.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
COMMON STOCK AND DIVIDEND INFORMATION
The common stock of Old Dominion Freight Line, Inc. is traded on the Nasdaq
Stock Market (National Market) under the symbol ODFL. At March 19, 1997, there
were approximately 950 holders of the common stock, including 129 stockholders
of record. No dividends have been paid on the common stock. The information
concerning restrictions on dividend payments required by Item 5 of Form 10-K
appears in Note 2 of the Notes to Consolidated Financial Statements appearing in
Item 8 of this report.
MARKET PRICES OF COMMON STOCK:
1996
---------------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------
High $ 12.50 $ 12.25 $ 10.50 $ 11.25
Low $ 7.50 $ 9.25 $ 7.50 $ 8.50
1995
---------------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------
High $ 18.00 $ 16.75 $ 16.25 $ 13.75
Low $ 15.88 $ 11.00 $ 9.50 $ 7.50
MARKET MAKERS:
Alex Brown & Sons, Inc.; Herzog, Henie, Geduld, Inc.; Wheat, First Securities,
Inc.; William Blair & Co.; and Furman Selz Inc.
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ITEM 6. SELECTED FINANCIAL DATA
For the Year Ended December 31,
-------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
AND OPERATING STATISTICS) 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------
OPERATING DATA:
Revenue from operations $ 293,006 $ 248,079 $ 243,547 $ 205,399 $ 183,870
-------------------------------------------------------------------
Operating expenses:
Salaries, wages and benefits 163,490 141,163 131,138 109,135 91,870
Purchased transportation 21,435 18,933 21,897 20,878 21,212
Operating supplies and expenses 30,288 22,945 21,716 18,206 17,026
Depreciation and amortization 16,091 13,630 11,781 10,119 8,604
Building and office equipment rents 6,874 5,991 5,292 4,162 3,815
Operating taxes and licenses 12,867 10,393 9,628 7,939 6,763
Insurance and claims 10,118 8,503 8,758 6,709 7,073
Communications and utilities 5,687 5,014 4,509 3,655 3,125
General supplies and expenses 10,444 10,195 9,406 8,658 7,457
Miscellaneous expenses 2,762 1,671 1,798 1,399 1,512
-------------------------------------------------------------------
Total operating expenses 280,056 238,438 225,923 190,860 168,457
-------------------------------------------------------------------
Operating income 12,950 9,641 17,624 14,539 15,413
Interest expense, net 2,903 1,510 1,107 1,099 1,287
Other expense, net 137 329 110 226 119
-------------------------------------------------------------------
Income before income taxes and
cumulative effect of changes in
accounting principles 9,910 7,802 16,407 13,214 14,007
Provision for income taxes 3,766 2,995 6,399 4,947 5,294
-------------------------------------------------------------------
Income before cumulative effect of changes
in accounting principles $ 6,144 $ 4,807 $ 10,008 $ 8,267 $ 8,713
-------------------------------------------------------------------
Income per common share before cumulative
effect of changes in accounting principles $0.74 $0.58 $1.20 $0.99 $1.04
-------------------------------------------------------------------
Weighted average shares outstanding 8,346 8,354 8,362 8,370 8,369
OPERATING STATISTICS:
Operating ratio 95.6% 96.1% 92.8% 92.9% 91.6%
LTL revenue per hundredweight $11.00 $10.87 $10.80 $10.43 $10.51
Revenue per intercity mile $2.92 $2.93 $3.04 $2.96 $2.96
Intercity miles (in thousands) 100,447 84,715 79,985 69,326 62,102
LTL tonnage (in thousands) 1,221 1,037 1,024 883 775
Shipments (in thousands) 2,388 2,084 2,034 1,740 1,510
Average length of haul (miles) 746 731 716 671 662
As of December 31,
-------------------------------------------------------------------
BALANCE SHEET DATA: 1996 1995 1994 1993 1992
-------------------------------------------------------------------
Current assets $56,264 $50,465 $45,643 $46,613 $41,866
Current liabilities 35,865 31,861 34,538 35,056 30,185
Total assets 170,726 143,346 124,035 110,696 94,849
Long-term debt 43,141 30,216 18,625 18,989 17,921
Stockholders' equity 74,928 68,784 63,726 53,676 44,979
11
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following table sets forth, for the years indicated, expenses and other
items as a percentage of revenue from operations:
1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------
Revenue from operations 100.0% 100.0% 100.0%
------------ ------------ -----------
Salaries, wages and benefits 55.8 56.9 53.8
Purchased transportation 7.3 7.6 9.0
Operating supplies and expenses 10.3 9.3 8.9
Depreciation and amortization 5.5 5.5 4.8
Building and office equipment rents 2.4 2.4 2.2
Operating taxes and licenses 4.4 4.2 4.0
Insurance and claims 3.5 3.4 3.6
Communication and utilities 1.9 2.0 1.9
General supplies and expenses 3.6 4.1 3.9
Miscellaneous expenses 0.9 0.7 0.7
------------ ------------ -----------
Total operating expenses 95.6 96.1 92.8
------------ ------------ -----------
Operating income 4.4 3.9 7.2
Interest expense, net 1.0 0.6 0.5
Other expense, net 0.0 0.2 0.0
------------ ------------ -----------
Income before income taxes 3.4 3.1 6.7
Provision for income taxes 1.3 1.2 2.6
------------ ------------ -----------
Net income 2.1% 1.9% 4.1%
============ ============ ===========
1996 COMPARED TO 1995
Revenue from operations for 1996 was $293,006,000, an increase of 18.1%,
compared to $248,079,000 for 1995. Less than truckload ("LTL") tonnage increased
17.7% during the year, and total tonnage increased 12.9%. During 1995, the
Company opened 15 new service centers in 10 additional states, and the increased
tonnage reflects improved market share in 1996 in both the expanded areas as
well as the service center network existing prior to the expansion. To a lesser
degree, the tonnage increase was also a result of six new service centers that
were opened by the Company in 1996, which enhanced service in existing major
metropolitan markets rather than expand geographical coverage.
Average LTL revenue per shipment increased 3.8% to $115.83 in the current year
compared to $111.62 for 1995. This increase was caused by two factors. First,
the average LTL revenue per hundredweight was $11.00 in 1996 compared to $10.87
for the previous year, an increase of 1.2%. This improvement reflects rate
increases implemented effective on January 1, 1996. In addition, the increase in
LTL revenue per shipment was also due to an increase in LTL weight per shipment,
which increased 2.5% to 1,053 lbs. for the current year from 1,027 lbs. for the
previous year. Generally,
12
revenue per hundredweight tends to decrease as shipment size increases; however,
the Company's focus on improving revenue yield caused an opposite effect during
the year, resulting in a higher revenue per hundredweight and a higher weight
per shipment.
Operating expense as a percentage of net revenue (operating ratio) was 95.6% for
1996 compared to 96.1% for the prior year. This decrease was primarily a result
of decreases in salaries, wages and benefits, purchased transportation and
general supplies and expenses from 68.6% of revenue in 1995 to 66.7% in 1996.
Salaries, wages and benefits decreased to 55.8% of revenue in the current year
from 56.9% for the previous year. This improvement was primarily a result of
lower fringe benefit costs as a percent of revenue, which decreased to 10.2% in
1996 from 11.8% in 1995. This decrease was due to a reduction in workers'
compensation and group health expenses, which decreased as a percent of payroll
to 7.8% in 1996 from 9.7% for the previous year. In addition, salaries decreased
to 9.5% of revenue for the current year from 10.0% for 1995. Purchased
transportation was reduced to 7.3% of revenue from 7.6% in 1995 as the Company
continued to replace cartage agents with Company personnel and equipment. The
Company cut general and administrative expenses resulting in a reduction of
these costs to 3.6% of revenue for 1996 compared to 4.1% for the previous year.
These reductions in expenses were somewhat offset by increases in both operating
supplies and expenses and operating taxes and licenses to 14.7% of revenue in
1996 from 13.5% for 1995. The increase in operating supplies and expenses is
primarily due to increased fuel costs experienced in 1996 to 4.9% of revenue up
from 4.0% in 1995. The increased fuel cost was partially offset by a fuel
surcharge implemented in mid-May of 1996 that is reflected in net revenue. The
slight increase in operating taxes and licenses is due to increased state fuel
tax liabilities.
The Company's net interest expense increased as a percent of revenue to 1.0% in
1996 from .6% in 1995, due to an increase in average outstanding debt.
Net income was $6,144,000 for the year ended December 31, 1996, an increase of
27.8%, compared to $4,807,000 for 1995. The effective tax rate was approximately
38% in both 1996 and 1995.
1995 COMPARED TO 1994
Revenue from operations for 1995 was $248,079,000, an increase of 1.9%, compared
to $243,547,000 for 1994. This increase primarily resulted from a 1.3% increase
in LTL tonnage. The increased tonnage was a result of expanding coverage into
the midwestern states of Minnesota, Wisconsin, Missouri, Indiana and Kansas. To
a lesser degree, the increase in revenue was also due to the October 1, 1995,
acquisition of certain assets of Navajo LTL, Inc., a Colorado-based LTL trucking
firm engaged in regional and inter-regional services primarily in the western
half of the country.
Average LTL revenue per hundredweight was $10.87 for 1995 compared to $10.80 for
1994, an increase of .6%. This increase reflects an increase in the average
length of haul of 2.1% as well as a decrease in the average weight per shipment
(which generally results in higher revenue per hundredweight) of 1.2%. The
increased LTL revenue per hundredweight was not due to price increases, which
were impractical throughout the year as the economy slowed and brought about
significant price competition.
Operating expense as a percentage of net revenue (operating ratio) was 96.1% for
1995 compared to 92.8% for the prior year. This increase was primarily a result
of increases in salaries, wages and benefits, depreciation and amortization and
operating supplies and expenses. Those increases were primarily a result of
three factors. First, in sharing its financial success of 1994, the Company gave
an average wage increase of 6.5% in 1995 to clerical, driver and dock employees.
Second, the Company added 15 service centers in 10 states in 1995, requiring an
initial investment in service centers, equipment, personnel, marketing and
administrative expenses. Those expenses were incurred before service center and
linehaul density was achieved and were a primary cause for increased
depreciation and amortization, building and office equipment rents, operating
taxes and licenses, communication and utilities and general supplies and
expenses. Combined, those expenses increased to 18.2% of
13
revenue in 1995 from 16.8% in 1994. As density is added in the expanded lanes,
costs should reduce as a percent of revenue. Third, the Company converted two
cartage agents to Company service centers and substituted other modes of
purchased transportation for Company equipment and personnel.
These increases were somewhat offset by lower purchased transportation, which
decreased as a percent of revenue to 7.6% during 1995 compared to 9.0% for 1994
as the Company replaced cartage agents with Company employees and equipment. The
decrease was partly offset by an increase in salaries, wages and benefits to
56.9% of revenue for 1995 from 53.8% for 1994. Additional increases in salaries,
wages and benefits were caused by adding necessary service center and sales
personnel to the expanded territory to establish operations and build markets.
Linehaul and pickup and delivery wages tended to be higher in the expanded areas
as the Company committed to provide superior service while building service
center and lane density. Despite an increase in salaries and wages as a percent
of revenue, fringe benefits decreased slightly to 11.8% in 1995 from 12.0% in
1994, due mainly to a reduction in workers' compensation expenses, which
decreased as a percent of payroll to 5.1% in 1995 compared to 7.7% for the
previous year.
The Company's net interest expense increased as a percent of revenue to .6% in
1995 from .5% in 1994, due to an increase in average outstanding debt.
Net income was $4,807,000 for the year ended December 31, 1995, a decrease of
52.0%, compared to $10,008,000 for 1994. The effective tax rate was
approximately 38% in 1995 compared to 39% for 1994 due to lower rates applicable
on decreased earnings.
LIQUIDITY AND CAPITAL RESOURCES
Expansion in both the size and number of service center facilities, as well as
the routine tractor and trailer turnover cycle, has required continued
investment in property and equipment. In order to accommodate this growth, the
Company incurred capital expenditures of $38,324,000 during the year ended
December 31, 1996, which includes $12,513,000 of outlays for service centers
that replaced smaller or previously leased facilities at various locations. Cash
flow generated internally was sufficient to finance a major portion of the
required capital expenditures during the year; however, on June 15, 1996, the
Company entered into a $30,000,000 private placement of debt through a Note
Purchase Agreement. The Note Purchase Agreement consists of a $10,000,000, 7.3%
senior note due December 15, 2002, and a $20,000,000, 7.59% senior note due June
15, 2006. The 2002 note provides for semi-annual interest payments with
increasing annual principal payments beginning December 15, 1998. The 2006 note
provides for semi-annual interest payments with equal annual principal payments
beginning June 15, 2000. The Note Purchase Agreement, which is uncollateralized,
contains certain financial covenants that limit the Company's debt to total
capital ratio, require stated levels of tangible net worth and specify a fixed
charge coverage ratio. Proceeds of the private placement were used to reduce an
outstanding line of credit and short-term notes by $26,650,000 with the
remaining proceeds used during the third quarter of 1996 for planned capital
expenditures. The remaining financing needs were achieved through borrowings on
the Company's line of credit, which was $5,890,000 at year-end December 31,
1996, compared to $17,500,000 at year-end 1995. Long-term debt including current
maturities increased to $43,141,000 at December 31, 1996, from $30,216,000 at
December 31, 1995. At year-end 1996, the Company's debt-to-equity ratio was
.58:1 compared to .44:1 at year-end 1995.
The Company estimates capital expenditures to be approximately $33,000,000 to
$35,000,000 for the year ending December 31, 1997. Of that, approximately
$26,000,000 is for additional tractors and trailers, and $7,000,000 to
$9,000,000 is for larger replacement service centers, expansion of existing
service centers and acquisition of other assets.
The Company generally meets its working capital needs with cash generated from
operations. As a result of the private placement of debt, the uncollateralized
committed Credit Agreement that previously provided a $25,000,000 line of credit
and a $15,000,000 letter of credit facility was replaced
14
with a $15,000,000 line of credit and a $17,500,000 letter of credit facility.
Interest on the line of credit was charged at rates that vary based upon a
certain financial performance ratio and the stated period of time the borrowings
were outstanding. The applicable interest rate for 1996 was based upon LIBOR
plus .75% for periods of 30-180 days and prime minus 1% for periods less than 30
days. The Company has also entered into a separate International Swap Dealers
Association Agreement that hedges the interest rate on a portion of the
outstanding amount on the credit line over a specified term. Pursuant to this
agreement, as of December 31, 1996, the Company has fixed $3,500,000 of the
outstanding credit line at a rate of 6.54% through June 19, 1998. A fee of .2%
is charged on the unused portion of the $32,500,000 line of credit and letter of
credit facility, and a fee of .6% is charged on outstanding letters of credit.
At December 31, 1996, there were $5,890,000 outstanding borrowings on the line
of credit and $7,826,000 outstanding on the letter of credit facility, which is
required for self-insured retention reserves for bodily injury, property damage
and workers' compensation insurance. The Company believes that there are
sufficient credit lines and capacity to meet seasonal and long-term financial
needs.
INFLATION
Most of the Company's expenses are affected by inflation, which generally
results in increased costs. During 1996, the effect of inflation on the
Company's results of operations was minimal.
SEASONALITY
The Company's operations are subject to seasonal trends common in the trucking
industry. Operating results in the first and fourth quarters are normally lower
due to reduced shipments during the winter months. The second and third quarters
are stronger due to increased demand for services during the spring and summer
months.
ENVIRONMENTAL
The Company is subject to federal, state and local environmental laws and
regulations, particularly relative to underground storage tanks ("USTs"). The
Company is in compliance with applicable environmental laws and regulations
relating to USTs and does not believe that the cost of future compliance should
have a material adverse effect on the Company's operations or financial
condition.
FORWARD-LOOKING INFORMATION
Forward-looking statements in the Company's Annual Report on Form 10-K, Annual
Report to Stockholders and other written and oral statements made by or on
behalf of the Company, including without limitation, statements relating to the
Company's goals, strategies, expectations, competitive environment, regulation
and availability of resources, are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that such forward-looking statements involve risks and uncertainties including,
but not limited to, the following: (1) the Company's goals, strategies and
expectations are subject to change at any time at the discretion of the Company;
(2) the Company's ability to maintain a nonunion, qualified work force; (3) the
competitive environment with respect to industry capacity and pricing; (4) the
availability of fuel and other significant resources; (5) the impact of various
regulatory bodies; and (6) other risks and uncertainties indicated from time to
time in the Company's filings with the Securities and Exchange Commission.
15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
--------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA) 1996 1995
- ----------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,353 $ 986
Customer receivables, less allowances of $5,699
and $5,083, respectively 39,983 34,378
Other receivables 890 3,042
Tires on equipment 4,514 3,939
Prepaid expenses 6,899 5,221
Deferred income taxes 2,625 2,899
---------------- ----------------
Total current assets 56,264 50,465
Property and equipment:
Revenue equipment 127,443 110,175
Land and structures 36,459 24,188
Other equipment 15,718 13,543
Leasehold improvements 479 508
---------------- ----------------
Total property and equipment 180,099 148,414
Less accumulated depreciation and amortization (70,924) (60,350)
---------------- ----------------
Net property and equipment 109,175 88,064
Other assets, less insurance policy loans of $1,815
and $1,733, respectively 5,287 4,817
---------------- ----------------
Total assets $ 170,726 $ 143,346
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,860 $ 10,504
Compensation and benefits 6,919 5,095
Claims and insurance accruals 8,918 8,645
Other accrued liabilities 1,509 1,423
Current maturities of long-term debt 3,659 6,194
---------------- ----------------
Total current liabilities 35,865 31,861
Long-term debt 39,482 24,022
Other non-current liabilities 7,074 8,383
Deferred income taxes 13,377 10,296
---------------- ----------------
Total long-term liabilities 59,933 42,701
Stockholders' equity:
Common stock - $.10 par value, 25,000,000
shares authorized, 8,345,608 shares outstanding
at December 31, 1996, and December 31, 1995 835 835
Capital in excess of par value 23,352 23,352
Retained earnings 50,741 44,597
---------------- ----------------
Total stockholders' equity 74,928 68,784
Commitments and contingencies - -
---------------- ----------------
Total liabilities and stockholders' equity $ 170,726 $ 143,346
================ ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
16
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31,
-------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1996 1995 1994
- ------------------------------------------------------------ -------------- -------------- ---------------
Revenue from operations $ 293,006 $ 248,079 $ 243,547
-------------- -------------- ---------------
Operating expenses:
Salaries, wages and benefits 163,490 141,163 131,138
Purchased transportation 21,435 18,933 21,897
Operating supplies and expenses 30,288 22,945 21,716
Depreciation and amortization 16,091 13,630 11,781
Building and office equipment rents 6,874 5,991 5,292
Operating taxes and licenses 12,867 10,393 9,628
Insurance and claims 10,118 8,503 8,758
Communications and utilities 5,687 5,014 4,509
General supplies and expenses 10,444 10,195 9,406
Miscellaneous expenses 2,762 1,671 1,798
-------------- -------------- ---------------
Total operating expenses 280,056 238,438 225,923
Operating income 12,950 9,641 17,624
Other deductions:
Interest expense, net 2,903 1,510 1,107
Other expense, net 137 329 110
-------------- -------------- ---------------
Total other deductions 3,040 1,839 1,217
Income before income taxes 9,910 7,802 16,407
Provision for income taxes 3,766 2,995 6,399
-------------- -------------- ---------------
Net income $ 6,144 $ 4,807 $ 10,008
============== ============== ===============
Net income per common share $ 0.74 $ 0.58 $ 1.20
============== ============== ===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
17
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Capital in
Common excess of Retained
(IN THOUSANDS) stock par value earnings Total
- ------------------------------------------------------------------------------------------------------------------------
Balance as of December 31, 1993 $836 $23,059 $29,781 $53,676
Net income 10,008 10,008
Excercise of stock options and other 41 1 42
----------------------------------------------------
Balance as of December 31, 1994 836 23,100 39,790 63,726
Net income 4,807 4,807
Release of common stock under Restricted Stock Agreement,
net of tax charge of $22 (1) 252 251
----------------------------------------------------
Balance as of December 31, 1995 835 23,352 44,597 68,784
Net income 6,144 6,144
----------------------------------------------------
Balance as of December 31, 1996 $835 $23,352 $50,741 $74,928
====================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
18
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
----------------------------------------------
(IN THOUSANDS) 1996 1995 1994
- ---------------------------------------------------------------- ------------- ------------- ------------
Cash flows from operating activities:
Net income $ 6,144 $ 4,807 $ 10,008
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 16,091 13,630 11,781
Deferred income taxes 3,355 2,536 982
(Gain) Loss on sale of property and equipment 91 (635) (380)
Changes in assets and liabilities:
Receivables, net (3,453) (6,808) (1,675)
Tires on equipment (575) (180) (838)
Prepaid expenses and other assets (2,148) (1,432) (590)
Accounts payable 4,356 1,730 (580)
Compensation, benefits and other accrued liabilities 1,910 117 (91)
Estimated liability for claims 273 (2,290) (1,765)
Income taxes payable - (1,722) 1,148
Other liabilities (1,309) 3,489 4,578
------------- ------------- ------------
Net cash provided by operating activities 24,735 13,242 22,578
------------- ------------- ------------
Cash flows from investing activities:
Purchase of property and equipment (38,324) (27,757) (27,081)
Proceeds from sale of property and equipment 1,031 1,266 1,620
------------- ------------- ------------
Net cash used by investing activities (37,293) (26,491) (25,461)
------------- ------------- ------------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 38,112 6,000 7,200
Principal payments under debt and capital lease agreements (13,577) (7,209) (7,314)
Net proceeds (payments) on short-term revolving line of credit (11,610) 12,800 (250)
Purchase and retirement of restricted stock - 251 -
Proceeds from conversion of stock options - - 41
------------- ------------- ------------
Net cash provided by (used in) financing activities 12,925 11,842 (323)
------------- ------------- ------------
Increase (Decrease) in cash and cash equivalents 367 (1,407) (3,206)
Cash and cash equivalents at beginning of period 986 2,393 5,599
------------- ------------- ------------
Cash and cash equivalents at end of period $ 1,353 $ 986 $ 2,393
============= ============= ============
Supplemental disclosure of noncash financing activities:
The Company released 38,334 shares of common stock for the year ended
December 31, 1995, under a Restricted Stock Agreement.
Cash paid for interest was approximately $1,990,000, $1,570,000 and $1,243,000
for the years ended December 31, 1996, 1995 and 1994, respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The Company is an inter-regional and regional motor carrier transporting
primarily less-than-truckload shipments of general commodities, such as consumer
goods, textiles and capital goods, to a diversified customer base. The Company
serves regional lanes in the Southeast, Northeast, Midwest and West regions of
the country. Old Dominion also serves inter-regional routes connecting these
geographic regions and major metropolitan markets throughout most of the
continental United States.
BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiary. All significant intercompany balances and transactions are
eliminated in consolidation.
REVENUE AND EXPENSE RECOGNITION
Operating revenue is recognized on a percentage of completion method based on
average transit time. Expenses associated with the operating revenue are
recognized when incurred.
TIRES ON EQUIPMENT
The cost of tires on equipment is amortized over the estimated tire life of 18
to 24 months.
FUEL AND SUPPLIES
Fuel and operating supplies are valued at the lower of cost or market using the
first-in, first-out method.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Major additions and improvements are
capitalized, while maintenance and repairs that do not improve or extend the
lives of the respective assets are charged to expense as incurred. Gain or loss
on retirement or disposal of assets is recorded in income or expense. The
Company periodically assesses the realizability of its long-lived assets and
evaluates such assets for impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable.
Depreciation and amortization are provided by the straight-line method over the
following estimated useful lives:
Structures 5 to 25 years
Revenue equipment 3 to 10 years
Other equipment 3 to 10 years
Leasehold improvements Lesser of 10 years or life of lease
CLAIMS AND INSURANCE ACCRUALS
Claims and insurance accruals reflect the estimated ultimate cost of claims for
cargo loss and damage, bodily injury and property damage, workers' compensation,
long-term disability and group health not covered by insurance. These costs are
charged to insurance and claims expense except for workers' compensation,
long-term disability and group health, which are charged to employee benefits
expense.
NET INCOME PER SHARE
Net income per common share is computed using the weighted average number of
common shares outstanding during the period. The weighted average number of
common shares outstanding was 8,345,608, 8,353,830 and 8,361,648 for the years
ended December 31, 1996, 1995 and 1994, respectively.
20
CASH AND CASH EQUIVALENTS
The Company considers cash on hand and deposits in banks along with certificates
of deposit and short-term marketable securities with original maturities of
three months or less as cash and cash equivalents for the purpose of the
statements of cash flows.
FAIR VALUES OF FINANCIAL INSTRUMENTS
At December 31, 1996, and 1995, the carrying value of financial instruments such
as cash and cash equivalents, trade receivables, trade payables and long-term
debt approximated their fair values. Fair value is determined based on expected
future cash flows, discounted at market interest rates, and other appropriate
valuation methodologies.
STOCK BASED COMPENSATION
Stock based compensation expense is recognized under the provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"), and the related Interpretations in accounting for its
employee stock options. Under APB 25, because the exercise price of the
Company's employee stock options equals the market price of the underlying stock
on the date of grant, no compensation expense is recognized. Pro forma
information regarding net income and earnings per share required by Financial
Accounting Standards Board Statement No. 123, "Accounting for Stock-Based
Compensation" ("FASB 123"), is not significant.
CREDIT RISK
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of customer receivables. Credit risk is
generally diversified due to the large number of entities comprising the
Company's customer base and their dispersion across many different industries
and geographic regions. As noted on the consolidated balance sheets, the Company
maintains an allowance for doubtful accounts to cover estimated credit losses.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Estimates made by the Company relate primarily to self insurance accruals and
allowances for uncollectible accounts. Actual results could differ from these
estimates.
RECLASSIFICATIONS
Certain amounts in prior years have been reclassified to conform with the
current period presentation.
NOTE 2 - LONG-TERM DEBT
Long-term debt consisted of the following:
December 31,
-------------------------------
(IN THOUSANDS) 1996 1995
- ------------------------------------------------------------------------------------------------------------------
Borrowings under bank revolving credit agreement $ 5,890 $ 17,500
Equipment obligations, principal payable in monthly installments
plus interest ranging from 5.2% to 7.0% 6,283 12,459
Senior notes payable 30,000 -
Capitalized lease obligations 968 257
-------------------------------
43,141 30,216
Less current maturities 3,659 6,194
-------------------------------
$ 39,482 $ 24,022
===============================
Equipment and capitalized lease obligations are collateralized by property and
equipment with a net book value of $9,823,000 at December 31, 1996.
21
As of December 31, 1996, aggregate maturities of long-term debt are as follows:
(IN THOUSANDS)
- --------------------------------------------------------------------
1997 $ 3,659
1998 3,358
1999 2,734
2000 4,857
2001 5,357
Thereafter 17,286
---------------
37,251
Borrowings outstanding under the revolving
credit agreement 5,890
---------------
$ 43,141
===============
On June 15, 1996, the Company entered into a $30,000,000 private placement of
debt through a Note Purchase Agreement. The Note Purchase Agreement consists of
a $10,000,000, 7.3% senior note due December 15, 2002, and a $20,000,000, 7.59%
senior note due June 15, 2006. The 2002 note provides for semi-annual interest
payments with increasing annual principal payments beginning December 15, 1998.
The 2006 note provides for semi-annual interest payments with equal annual
principal payments beginning June 15, 2000. The Note Purchase Agreement, which
is uncollateralized, contains certain financial covenants that limit the
Company's debt to total capital ratio, require stated levels of tangible net
worth and specify a fixed charge coverage ratio. Proceeds of the private
placement were used to reduce an outstanding line of credit and short-term notes
by $26,650,000 with the remaining proceeds used during the third quarter of 1996
for planned capital expenditures.
As a result of the private placement of debt, the $40,000,000 uncollateralized
committed credit agreement that previously provided a $25,000,000 line of credit
and a $15,000,000 letter of credit facility was replaced with a $32,500,000
uncollateralized committed credit agreement consisting of a $15,000,000 line of
credit and a $17,500,000 letter of credit facility. Interest on the line of
credit was charged at rates that vary based upon a certain financial performance
ratio and the stated period of time the borrowings were outstanding. The
applicable interest rate for 1996 was based upon LIBOR plus .75% for periods of
30-180 days and prime minus 1% for periods less than 30 days. The Company has
also entered into a separate International Swap Dealers Association Agreement
that may be used to hedge the interest rate on any portion of the outstanding
amount on the credit line over a specified term. Pursuant to this agreement, as
of December 31, 1996, the Company has fixed $3,500,000 of the outstanding credit
line at a rate of 6.54% through June 19, 1998. A fee of .2% is charged on the
unused portion of the $32,500,000 line of credit and letter of credit facility,
and a fee of .6% is charged on the outstanding letters of credit. The agreement
also places certain restrictions upon the purchase, redemption or acquisition of
the Company's stock. Additionally, dividends may be paid in any fiscal year only
if the Company is not in default of any agreement provisions and if the
dividends have been approved by necessary corporate action and are permitted by
law. Consolidated retained earnings that were free of dividend restrictions were
$10,336,000 at December 31, 1996. At year-end 1996, there was $5,890,000
outstanding on the line of credit, and there was $7,826,000 outstanding on the
letter of credit facility. This agreement expires on May 31, 2000.
22
NOTE 3 - LEASES
The Company leases revenue equipment under a capital lease that expires in 1999.
These assets are included in property and equipment as follows:
December 31,
----------------------------
(IN THOUSANDS) 1996 1995
- -------------------------------------------------------------------
Revenue equipment $ 1,112 $ 2,113
Less accumulated amortization 154 1,865
------------------------------
$ 958 $ 248
==============================
Future minimum annual lease payments as of December 31, 1996, are as follows:
Capital Operating
(IN THOUSANDS) Lease Leases Total
- ---------------------------------------------------------------------------------------------------
1997 $ 416 $ 7,202 $ 7,618
1998 407 3,867 4,274
1999 237 2,478 2,715
2000 1,374 1,374
2001 539 539
Thereafter 1,438 1,438
-----------------------------------------------
Total minimum lease payments 1,060 $ 16,898 $ 17,958
==============================
Less amount representing interest 92
-------------
Present value of capitalized lease obligations $ 968
=============
Aggregate expense under operating leases approximated $8,841,000, $7,580,000 and
$6,988,000 for 1996, 1995 and 1994, respectively.
23
NOTE 4 - INCOME TAXES
The components of the provision for income taxes are as follows:
Year ended December 31,
-----------------------------------------
(IN THOUSANDS) 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------------
Current:
Federal $ 395 $ 839 $ 5,050
State 16 (380) 367
-----------------------------------------
411 459 5,417
-----------------------------------------
Deferred:
Federal 2,857 2,118 882
State 498 418 100
-----------------------------------------
3,355 2,536 982
-----------------------------------------
Total provision for income taxes $ 3,766 $ 2,995 $ 6,399
=========================================
Net cash paid (refunds received) for income taxes during 1996, 1995 and 1994
aggregated ($987,000), $4,036,000 and $3,531,000, respectively.
A reconciliation of the statutory federal income tax rates with the Company's
effective income tax rates for 1996, 1995 and 1994 is as follows:
Year ended December 31,
-----------------------------------------
(IN THOUSANDS) 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------------
Tax provision at statutory rate on income before income taxes $ 3,369 $ 2,653 $ 5,743
State income taxes, net of federal benefit 122 8 239
Meals and entertainment disallowance 229 219 205
Other, net 46 115 212
-----------------------------------------
Total provision for income taxes $ 3,766 $ 2,995 $ 6,399
=========================================
Deferred tax assets and liabilities consist of the following:
December 31,
-----------------------------
(IN THOUSANDS) 1996 1995
- ------------------------------------------------ -----------------------------
Deferred tax assets:
Claims and insurance reserves $ 5,957 $ 6,450
Allowance for doubtful accounts 2,223 1,983
Property and equipment 694 694
Accrued vacation 684 511
Other 714 590
-----------------------------
$ 10,272 $ 10,228
=============================
Deferred tax liabilities:
Depreciation and amortization $ 16,983 $ 14,118
Tires on equipment 1,761 1,536
Employee benefits 1,243 942
Other 1,037 1,029
-----------------------------
$ 21,024 $ 17,625
=============================
24
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company leases revenue equipment and service center facilities from certain
stockholders, employees and affiliates under both capital and operating leases.
Future minimum lease commitments to affiliates at December 31, 1996, are as
follows:
(IN THOUSANDS) Operating lease Capital lease Total
- ---------------------------------------------------------------------------------------------------------------
1997 $ 359 $ 416 $ 775
1998 366 407 773
1999 373 237 610
2000 188 188
-----------------------------------------------------------
Total minimum lease payments $ 1,286 1,060 $ 2,346
====================== =================
Less amount representing interest 92
--------------------
Present value of capitalized lease obligations $968
====================
Lease payments to affiliates of the Company were $826,000, $891,000 and $998,000
in 1996, 1995 and 1994, respectively.
The Company purchased fuel, equipment repairs and other services from an
affiliate for which it paid $401,000, $333,000 and $318,000 in 1996, 1995 and
1994, respectively. Charges to the affiliate for rent, equipment repairs, fuel
and other services provided by the Company aggregated $1,009,000, $865,000 and
$863,000 during 1996, 1995 and 1994, respectively.
NOTE 6 - EMPLOYEE RETIREMENT PLAN CONTRIBUTION EXPENSE
Substantially all employees meeting certain service requirements are eligible to
participate in the Company's 401(k) employee retirement plan. Employee
contributions are limited to a percentage of their compensation, as defined in
the plan. The Company makes contributions based on the greater of a percentage
of employee contributions or a percentage of net income after taxes. Company
contributions for 1996, 1995 and 1994 were $753,000, $576,000 and $1,001,000,
respectively.
25
NOTE 7 - STOCK OPTIONS
In 1991, the Board of Directors and stockholders adopted the 1991 Employee Stock
Option Plan ("Plan") under which 250,000 shares of common stock are reserved for
stock option grants to certain officers and employees. Options granted under the
Plan may be incentive stock options or nonqualified stock options. The Plan
provides that options may be granted at prices not less than the fair market
value on the date the option is granted, which means the closing price of a
share of common stock as reported on the Nasdaq Stock Market (National Market)
on such day or the preceding day if the shares are not included in the Nasdaq
system on the grant day. The Stock Option Plan Committee of the Board of
Directors will determine the period during which an option may be exercised on
the date the option is granted; however, under the terms of the Plan, the option
period cannot extend more than ten years from the date on which the option is
granted. Options may not be granted under the Plan after August 31, 2001. A
summary of the changes in the number of common shares under option during the
years ended December 31, 1996, 1995 and 1994 follows:
Number of Per share Options reserved
options option price for future grant
- ---------------------------------------------------------------------------------------------------
Balance as of December 31, 1993 150,000 $13.875 - $19.25 90,000
Granted 31,500 $19.00 (31,500)
Exercised (3,000) $13.875 -
Canceled (9,500) $13.875 - $19.25 9,500
---------------------------------------------------------
Balance as of December 31, 1994 169,000 $13.875 - $19.25 68,000
Granted 27,500 $10.00 (27,500)
Exercised - -
Canceled - -
---------------------------------------------------------
Balance as of December 31, 1995 196,500 $10.00 - $19.25 40,500
Granted - -
Exercised - -
Canceled (15,000) $10.00 - $19.25 15,000
---------------------------------------------------------
Balance as of December 31, 1996 $181,500 $10.00 - $19.25 $55,500
======== =======
Options exercisable at December 31, 1996, were 118,200.
NOTE 8 - RESTRICTED STOCK
In 1991, the Board of Directors and stockholders approved a Restricted Stock
Agreement with an officer of the Company. Pursuant to the agreement, 153,336
shares of the Company's common stock have been issued and are reserved for
release to the officer in four equal, biannual installments originally scheduled
for January 1, 1994, 1996, 1998 and 2000. The restricted shares are released to
the officer conditioned on continued employment. Compensation expense is
recognized ratably over the vesting period based on the stock price as of
October 24, 1991, the date of the initial public offering. The amount of
compensation expense recognized pursuant to this agreement was $232,000 for each
of the three years ended December 31, 1996.
26
NOTE 9 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarter
---------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) First Second Third Fourth Total
- -----------------------------------------------------------------------------------------------------------------
1996
Revenue $68,262 $74,862 $77,279 $72,603 $293,006
Operating income 1,696 3,393 4,509 3,352 12,950
Net income 657 1,643 2,180 1,664 6,144
Net income per share 0.08 0.20 0.26 0.20 0.74
1995
Revenue $57,744 $60,371 $62,891 $67,073 $248,079
Operating income 3,230 3,590 2,042 779 9,641
Net income 1,768 1,969 914 156 4,807
Net income per share 0.21 0.24 0.11 0.02 0.58
NOTE 10 - CONTINGENCIES
The Company is involved in various legal proceedings and claims that have arisen
in the ordinary course of its business that have not been fully adjudicated.
Many of these are covered in whole or in part by insurance. These actions, when
finally concluded and determined, will not, in the opinion of management, have
an adverse effect upon the financial position or results of operations of the
Company.
27
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Old Dominion Freight Line, Inc.
We have audited the accompanying consolidated balance sheets of Old Dominion
Freight Line, Inc. and its subsidiary as of December 31, 1996 and 1995, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
1996. Our audits also included the financial statement schedule listed in Item
14(a). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Old Dominion
Freight Line, Inc. and its subsidiary at December 31, 1996, and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
Ernst & Young LLP
Winston-Salem, North Carolina
January 23, 1997
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning the Company's directors required by Item 10
of Form 10-K is incorporated by reference to the Company's proxy statement for
the 1997 Annual Meeting of its Stockholders under the caption's "Election of
Directors" and "Principal Stockholders - Compliance with Beneficial Ownership
Reporting Rules", reference to which is hereby made, and the information there
is incorporated herein by reference.
The information concerning the Company's executive officers required by
Item 10 of Form 10-K appears in Item 1 of this report under the heading
"Executive Officers of the Company".
28
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 of Form 10-K appears in the
Company's proxy statement for the 1997 Annual Meeting of its Stockholders under
the caption "Executive Compensation", reference to which is hereby made, and the
information there is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 of Form 10-K appears in the
Company's proxy statement for the 1997 Annual Meeting of its Stockholders under
the captions "Election of Directors" and "Principal Stockholders", reference to
which is hereby made, and the information there is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 of Form 10-K appears in the
Company's proxy statement for the 1997 Annual Meeting of its Stockholders under
the caption "Executive Compensation - Compensation Committee Interlocks and
Insider Participation", reference to which is hereby made, and the information
there is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements.
The following consolidated financial statements of Old Dominion Freight
Line, Inc., are included in Item 8:
Consolidated Balance Sheets - December 31, 1996, and December 31, 1995
Consolidated Statements of Operations - Years ended December 31, 1996,
December 31, 1995, and December 31, 1994
Consolidated Statements of Changes in Stockholders' Equity - Years
ended December 31, 1996, December 31, 1995, and December 31, 1994
Consolidated Statements of Cash Flows - Years ended December 31, 1996,
December 31, 1995, and December 31, 1994
Notes to the Consolidated Financial Statements
(a)(2) Financial Statement Schedules.
The following financial statement schedule of Old Dominion Freight
Line, Inc., is included in response to Item 14(d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the instructions or are inapplicable and, therefore, have been omitted.
29
The documents listed below are filed under subsection (d) of Item 14:
(a)(3) Exhibits Filed. The exhibits listed in the accompanying Exhibit Index are
filed as a part of this report.
(b) Reports on Form 8-K. None filed during the last quarter of the period
covered by this report.
(c) Exhibits. See Exhibit Index.
(d) Financial Statement Schedules.
SCHEDULE II
OLD DOMINION FREIGHT LINE, INC.
VALUATION AND QUALIFYING ACCOUNTS
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND DEDUCTIONS END OF
DESCRIPTION OF YEAR EXPENSES (1) OTHER (2) YEAR
- --------------------------------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31, 1994
ALLOWANCE FOR
DOUBTFUL ACCOUNTS $ 2,182,000 $ 1,842,000 $ 1,248,000 $1,510,000 $ 4,286,000
=====================================================================================
YEAR ENDED
DECEMBER 31, 1995
ALLOWANCE FOR
DOUBTFUL ACCOUNTS $ 4,286,000 $ 1,954,000 $ 1,157,000 $ 5,083,000
=====================================================================================
YEAR ENDED
DECEMBER 31, 1996
ALLOWANCE FOR
DOUBTFUL ACCOUNTS $ 5,083,000 $ 2,345,000 $ 1,729,000 $ 5,699,000
=====================================================================================
(1) Deductions represent amounts written off.
(2) Other represents reinstatement of reserves for amounts previously written
off.
30
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
OLD DOMINION FREIGHT LINE, INC.
Dated: March 17, 1997 By: EARL E. CONGDON
---------------
Earl E. Congdon
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Name and Signature Position Date
EARL E. CONGDON Chairman of the Board and March 17, 1997
- ------------------ Chief Executive Officer
Earl E. Congdon
JOHN A. EBELING President and Director March 17, 1997
- ------------------
John A. Ebeling
J. WES FRYE Treasurer (Principal Financial March 17, 1997
- --------------------------- Officer)
J. Wes Frye
JOHN P. BOOKER III Controller (Principal Accounting March 17, 1997
- --------------------------- Officer)
John P. Booker III
JOHN R. CONGDON Director March 17, 1997
- --------------------------
John R. Congdon
HAROLD G. HOAK Director March 17, 1997
- --------------------------
Harold G. Hoak
FRANZ F. HOLSCHER Director March 17, 1997
- --------------------------
Franz F. Holscher
EXHIBIT INDEX
TO ANNUAL REPORT ON FORM 10-K
OLD DOMINION FREIGHT LINE, INC.
FOR YEAR ENDED DECEMBER 31, 1996
Exhibit No. Description
3.1.1(a) Articles of Incorporation (as amended and restated September
18, 1991)
3.2(a) Bylaws of Old Dominion Freight Line, Inc.
4.1(a) Specimen certificate of Common Stock
4.3(b) ISDA Master Agreement and Schedule between First Union National Bank of North Carolina and
Old Dominion Freight Line, Inc., dated June 15, 1995
4.4(b) Credit Agreement between First Union National Bank of North Carolina and Old Dominion
Freight Line, Inc., dated June 14, 1995
4.4.1(b) Form of note issued by Company pursuant to the Credit Agreement between First Union National
Bank of North Carolina and Old Dominion Freight Line, Inc., dated June 14, 1995
4.4.2(c) First Amendment to Credit Agreement between First Union National Bank of North Carolina and
Old Dominion Freight Line, Inc., dated February 2, 1996
4.4.3(d) Second Amendment to the Credit Agreement between Old Dominion Freight Line, Inc.
and First Union National Bank of North Carolina, dated April 29, 1996
4.4.4(d) Third Amendment to the Credit Agreement between Old Dominion Freight Line, Inc.
and First Union National Bank of North Carolina, dated June 15, 1996
4.5(d) Note Purchase Agreement between Nationwide Life Insurance Company, New York
Life Insurance Company and Old Dominion Freight Line, Inc., dated June 15, 1996
4.5.1(d) Forms of notes issued by Company pursuant to Note Purchase Agreement between
Nationwide Life Insurance Company, New York Life Insurance Company and Old Dominion
Freight Line, Inc., dated June 15, 1996
10.1(a) Employment Agreement Between Old Dominion Freight Line, Inc., and John A.
Ebeling (as amended April 7, 1988)
10.3(a) Restricted Stock Agreement between Old Dominion Freight Line, Inc., and John
A. Ebeling, dated August 19, 1991
10.4(a) 1991 Employee Stock Option Plan of Old Dominion Freight Line, Inc.
10.5(a) Stock Option Agreement pursuant to the 1991 Employee Stock Option Plan of
Old Dominion Freight Line, Inc. (included in Exhibit 10.4)
10.9(a) E & J Enterprises Trailer Lease Agreement, effective August 1, 1991
10.9.1 Extension of E & J Trailer Lease Agreement, effective August 1, 1996
10.15(c) Lease Agreement between Robert A. Cox, Jr., Trustee, and Old Dominion Freight
Line, Inc., dated as of October 31, 1995
23.1 Consent of Ernst & Young LLP
27 Financial Data Schedule
- --------------------------------------------------
(a) Incorporated by reference to the exhibit of the same number contained in the Company's registration
statement on Form S-1 filed under the Securities Act of 1933 (SEC File: 33-42631)
(b) Incorporated by reference to the exhibit contained in the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995
(c) Incorporated by reference to the exhibit of the same number contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995
(d) Incorporated by reference to the exhibit of the same number contained in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1996
32